Firm Risk-Taking and CEO Visibility

Yixin Liu, Yilei Zhang, Pornsit Jiraporn

Research output: Contribution to journalArticle

1 Scopus citations

Abstract

This paper investigates the relationship between CEO visibility and corporate risk-Taking. The empirical results show that more visible CEOs tend to take more risk. A one-standard-deviation shock in the CEOs media exposure results in a 6.53% rise in total risk. We further investigate the channels of risk-Taking activities and find that more visible CEOs seek more R&D investments. The positive effect of CEO visibility on firm risk policies is clearly of concern to bondholders. Consistent with this view, we report that CEO visibility has a significant negative effect on firm credit ratings. Our results highlight the importance of CEO visibility on a crucial corporate outcome-the extent of corporate risk-Taking.

Original languageEnglish (US)
Article number1650010
JournalQuarterly Journal of Finance
Volume6
Issue number3
DOIs
StatePublished - Sep 1 2016

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics
  • Strategy and Management

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